A Daktronics display. Image source: Daktronics.
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What: Shares of electronic display-system provider Daktronics slumped on Wednesday following the company's fiscal fourth-quarter report. Daktronics missed analyst estimates badly on all fronts, leading the stock to fall about 16.5% by 11:30 a.m. EDT.
So what: Daktronics reported quarterly revenue of $138.5 million, down 12.4% year over year, and about $17.7 million below the average analyst estimate. The value of orders the company received during the quarter also tumbled, with $143.2 million of new business booked well below the $196.1 million of orders received during the same period last year.
Daktronics blamed the steep drop in revenue on light international and commercial billboard demand, and the drop in orders on the lack of multi-million projects that were booked during the prior-year period.
EPS came in at a loss of $0.07, down from a gain of $0.09 during the same period last year, and $0.15 lower than analyst expectations. Lower revenue, as well as higher warranty expenses, drove the earnings decline.
Now what: Daktronics didn't provide specific guidance, but CEO Reece Kurtenbach provided some commentary for investors.
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The marketplace we operate in continues to expand as digital technology becomes ever more prevalent. We are the most experienced market provider for video system design and delivery, lifetime support, and value to our customers. Global macroeconomic factors including low oil prices, strong U.S. dollar, slowing GDP, political instability and other uncertainties continue to affect customer purchasing decisions. This creates some uncertainty in the near-term outlook for orders; therefore, we expect modest growth in fiscal 2017 and we will carefully manage our spending.
Given Daktronics' dependence on relatively large contracts, and its sensitivity to the state of the global economy, volatility in the company's results is to be expected. That reasoning wasn't enough to prevent investors from pushing the stock lower on Wednesday.
The article Why Shares of Daktronics Inc. Tumbled Today originally appeared on Fool.com.
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